KEY POINTS:
Auckland developer Tony Gapes - whose apartments were some of the early casualties of the leaky homes crisis - is now developing a US$35 million ($52.23 million) apartment project in one of the world's driest places.
Mr Gapes, who developed hundreds of units in Auckland, has shifted to
Phoenix, Arizona where he spends about a week every month.
He is building a condominium project, O4, marketing 84 units from US$350,000 to US$500,000 each.
The project takes its name from its site at the intersection of Osborn Rd and Fourth Ave and construction is due to start in February.
"We have bought another downtown Phoenix site and we are now going through the zoning approval process for 180 units and an office block and we are looking around for some more development sites."
Some apartments developed by Mr Gapes' Auckland-headquartered Redwood Group have sprung leaks.
Problems arose with the $12 million 65-unit Silverfield Terraces site in St Lukes - found to be leaking badly just 16 months after it was built - and the 97-apartment Eden Two site in Mt Eden, which suffered leaks and rotting balconies.
In May, the High Court upheld an arbitrator's decision that a builder must fix defects at Silverfield. Downer Construction (NZ) built the townhouse project at 3 Wagener Place between August 2000 and July 2001. But soon after unit owners moved in, they reported leaks.
The arbitrator found that Mr Gapes' Silverfield Developments proved 115 defects in workmanship on the townhouse project and ruled Downer had breached its obligations.
Mr Gapes said the case was now heading for the Court of Appeal.
"We have spent well over $1 million on an arbitration and High Court cases to get Downers to come back and rectify their work there.
"To date we have won four High Court hearings and an arbitration ordering Downers back to fix the work and we have also had costs awarded to us from Downers.
"They have won nothing and paid us nothing and are now appealing to the Court of Appeal while the problems at the development are just getting worse," Mr Gapes said.
At Mt Eden, leaks and rotten balconies were found at Mr Gapes' Eden Two in 2003. A builder was called in to make repairs and remove balustrades to allow timber to dry.
Phillip O'Sullivan of Takapuna-based building consultants and weathertightness specialists Prendos said it was ironic that Mr Gapes had moved to one of the world's driest cities. "He won't have to worry too much about leaky buildings there."
But Redwood has promoted itself in the US as one of New Zealand's top developers. It has also marketed its Mt Eden project as "a venture that transformed a previously derelict inner-city fringe site to a bustling community complete with terraced houses."
Mr Gapes has appointed Andrew Crosby vice-president of Redwood in Phoenix and said Mr Crosby had worked at Redwood for nine years. Redwood's Phoenix staff are working with Arizona real estate agents Cambridge Properties to market O4.
Mr Gapes said he was enjoying being in the US but wanted to complete work before he spoke much about his move.
Redwood spend almost a year researching world markets before deciding on Phoenix, he said.
The city's immigration growth and economic expansion appealed.
In Auckland, Redwood developed Scene One for $48.5 million, Scene Two for $42.2 million and Scene Three for $62.7 million.
It developed Normanby Mews apartments in Mt Eden for $9.5 million, Eden One for $20.7 million and Eden Two for $26.6 million.